Passenger vehicles stay ahead of the curve for 2nd month in calendar year

Passenger vehicle makers in February are estimated to dispatch 360,000 units to their dealers, the highest ever for February in any year. Sustained demand, coupled with new model launches, is likely to notch up sales by 8% year-on-year, as per industry estimates.

It would be the first time in seven years when February will see two consecutive years of growth on YoY basis. In the first 10 months of FY24, passenger car makers sold 3.46 million vehicles, up 7.8% year-on-year. A swelling inventory at the sales channels – 300,000 units at the end of February from 262,000 to 263,000 units in the beginning of the month is prompting companies to tread with caution.

“In line with the expectations, though the overall demand remains strong, bookings have seen a decline of 4-5% year on-year as the pent-up demand is behind us and supplies have fully caught up with demand,” said Shashank Srivastava, senior executive officer – sales and marketing, at car market leader Maruti Suzuki India.

Usually, March because of being the last month of the fiscal is a month of high dispatches, but this year could be different due to swelling inventory – though still less than 30 days, may prompt companies to curtail dispatches, said Srivastava. Owing to a high base effect Q2 of FY23, he expects sales growth in the next financial year to start plateauing from July onwards.”

Tarun Garg, chief operating officer at Hyundai Motor India, said Hyundai “Is receiving a robust demand” for its products, reflecting positively on its market position. The company has received over 70,000 bookings for the recently launched new Creta, and Exter too continues its favourable run. “We are closely monitoring market dynamics and maintain a cautiously optimistic outlook as we navigate potential shifts in consumer sentiment,” he said.

Passenger vehicle volume will hit a new peak for the third straight time next fiscal, growing 5-7% on a high base of 6-8% estimated for the current fiscal, as sport utility vehicles (SUVs) race ahead when demand for cars and exports remain muted, Crisil said in a statement on Monday.

Manish Raj Singhania, president at Federation of Automobile Dealers Association said, though demand remains strong, inventory at sales channels are at an elevated level as automakers continue to dispatch a lot more than what the demand is. “Unless they curtail dispatches to 275,000 units, dealer stock will not come down,” he said.

The sustenance of the current monthly sales will take India’s PV sales full fiscal year tally to close to 4.2 million-the highest ever. Barring December 2023, all months of the current fiscal year had sales volume more than three lakh units resulting in an average monthly sales of 346,553 units.

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